38392 Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) 

(S7–10–04) (Final Rule) (‘‘Regulation NMS’’). 

5See Securities Exchange Act Release No. 51808, 

84 FR 5202, 5253 (February 20, 2019) (File No. S7– 

05–18) (Transaction Fee Pilot for NMS Stocks Final 

Rule) (‘‘Transaction Fee Pilot’’). 

6See Cboe Global Markets, U.S. Equities Market 

Volume Summary, available at http://

markets.cboe.com/us/equities/market_share/. See 

generally https://www.sec.gov/fast-answers/ 

divisionsmarketregmrexchangesshtml.html. 

7See FINRA ATS Transparency Data, available at 

https://otctransparency.finra.org/otctransparency/ 

AtsIssueData. Although 54 alternative trading 

systems were registered with the Commission as of 

July 29, 2019, only 31 are currently trading. A list 

of alternative trading systems registered with the 

Commission is available at https://www.sec.gov/ 

foia/docs/atslist.htm. 

8See Cboe Global Markets U.S. Equities Market 

Volume Summary, available at http://

markets.cboe.com/us/equities/market_share/. 

9See id. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92401; File No. SR– 

NYSENAT–2021–14] 

Self-Regulatory Organizations; NYSE 

National, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Its Schedule of 

Fees and Rebates 

July 14, 2021. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),2 and Rule 19b–4 thereunder,3

notice is hereby given that, on July 1, 

2021, NYSE National, Inc. (‘‘NYSE 

National’’ or the ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

Schedule of Fees and Rebates (‘‘Fee 

Schedule’’) to modify the requirements 

to qualify for Adding Tier 2 and 

Removing Tier 1. The proposed rule 

change is available on the Exchange’s 

website at www.nyse.com, at the 

principal office of the Exchange, and at 

the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

set forth in sections A, B, and C below, 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

Fee Schedule to modify the 

requirements to qualify for Adding Tier 

2 and Removing Tier 1. 

The proposed changes respond to the 

current competitive environment where 

order flow providers have a choice of 

where to direct liquidity-providing and 

liquidity-removing orders by offering 

further incentives for ETP Holders to 

send additional adding and removing 

liquidity to the Exchange. 

The Exchange proposes to implement 

the rule change on July 1, 2021. 

Current Market and Competitive 

Environment 

The Exchange operates in a highly 

competitive market. The Commission 

has repeatedly expressed its preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. Specifically, in Regulation 

NMS, the Commission highlighted the 

importance of market forces in 

determining prices and SRO revenues 

and, also, recognized that current 

regulation of the market system ‘‘has 

been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 4

As the Commission itself has 

recognized, the market for trading 

services in NMS stocks has become 

‘‘more fragmented and competitive.’’ 5

Indeed, equity trading is currently 

dispersed across 16 exchanges,6 31 

alternative trading systems,7 and 

numerous broker-dealer internalizers 

and wholesalers. Based on publiclyavailable information, no single 

exchange has more than 18% of the 

market.8 Therefore, no exchange 

possesses significant pricing power in 

the execution of equity order flow. More 

specifically, the Exchange’s share of 

executed volume of equity trades in 

Tapes A, B and C securities is less than 

2%.9

The Exchange believes that the evershifting market share among the 

exchanges from month to month 

demonstrates that market participants 

can move order flow, or discontinue or 

reduce use of certain products, in 

response to fee changes. While it is not 

possible to know a firm’s reason for 

moving order flow, the Exchange 

believes that one such reason is because 

of fee changes at any of the registered 

exchanges or non-exchange trading 

venues to which a firm routes order 

flow. These fees can vary from month to 

month, and not all are publicly 

available. With respect to nonmarketable order flow that would 

provide liquidity on an exchange, ETP 

Holders can choose from any one of the 

16 currently operating registered 

exchanges to route such order flow. 

Accordingly, competitive forces 

constrain the Exchange’s transaction 

fees, and market participants can readily 

trade on competing venues if they deem 

pricing levels at those other venues to 

be more favorable. 

The Exchange utilizes a ‘‘takermaker’’ or inverted fee model to attract 

orders that provide liquidity at the most 

competitive prices. Under the takermaker model, offering rebates for taking 

(or removing) liquidity increases the 

likelihood that market participants will 

send orders to the Exchange to trade 

with liquidity providers’ orders. This 

increased taker order flow provides an 

incentive for market participants to send 

orders that provide liquidity. The 

Exchange generally charges fees for 

order flow that provides liquidity. These 

fees are reasonable due to the additional 

marketable interest (in part attracted by 

the Exchange’s rebate to remove 

liquidity) with which those order flow 

providers can trade. 

Proposed Rule Change 

To respond to this competitive 

environment, the Exchange proposes the 

following changes to its Fee Schedule 

designed to provide order flow 

providers with additional incentives to 

route order flow to the Exchange. As 

described above, ETP Holders have a 

choice of where to send their order flow. 


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10 15 U.S.C. 78f(b). 

11 15 U.S.C. 78f(b)(4) & (5). 

12See Regulation NMS, supra note 4, at 37499. 

13See Securities Exchange Act Release No. 61358, 

75 FR 3594, 3597 (January 21, 2010) (File No. S7– 

02–10) (Concept Release on Equity Market 

Structure). 

Proposed Change to Adding Tier 2 

Under current Adding Tier 2, ETP 

Holders that add liquidity to the 

Exchange in securities with a per share 

price of $1.00 or more and that have at 

least 0.13% or more of Adding ADV as 

a percentage of US CADV or at least 16 

million Adding ADV are charged a fee 

of $0.0022 per share for adding 

displayed orders in Tape A, B, and C 

securities. The Exchange proposes to 

revise requirements to qualify for 

Adding Tier 2 as follows: ETP Holders 

would qualify for the current rebate [sic] 

by having at least 0.11% or more 

Adding ADV as a percentage of US 

CADV or at least 13 million shares or 

more of Adding ADV. The Exchange 

does not propose any changes to the 

Adding Rate for Adding Tier 2. 

The Exchange believes that lowering 

the ADV requirements to qualify for 

Adding Tier 2 as proposed above will 

allow greater numbers of ETP Holders to 

potentially qualify for the tier, and 

therefore will incentivize more ETP 

Holders to route their liquidityproviding order flow to the Exchange in 

order to qualify for the tier. This in turn 

would support the quality of price 

discovery on the Exchange and provide 

additional price improvement 

opportunities for incoming orders. The 

Exchange believes that by correlating 

the amount of the fee to the level of 

orders sent by an ETP Holder that add 

liquidity, the Exchange’s fee structure 

would incentivize ETP Holders to 

submit more orders that add liquidity to 

the Exchange, thereby increasing the 

potential for price improvement to 

incoming marketable orders submitted 

to the Exchange. 

As noted above, the Exchange 

operates in a competitive environment, 

particularly as relates to attracting nonmarketable orders, which add liquidity 

to the Exchange. The Exchange does not 

know how much order flow ETP 

Holders choose to route to other 

exchanges or to off-exchange venues. 

Based on the profile of liquidity-adding 

firms generally, the Exchange believes 

that additional ETP Holders could 

qualify for Adding Tier 2 under the 

revised qualification criteria if they 

choose to direct order flow to the 

Exchange. However, without having a 

view of ETP Holders’ activity on other 

exchanges and off-exchange venues, the 

Exchange has no way of knowing 

whether this proposed rule change 

would result in any additional ETP 

Holders directing orders to the 

Exchange in order to qualify for the 

Adding Tier 2 rate. 

Proposed Changes to Removing Tier 1 

Under current Removing Tier 1, the 

Exchange provides a rebate of $0.0030 

per share to ETP Holders that remove 

liquidity from the Exchange in 

securities with a per share price of $1.00 

or more and that have at least 250,000 

Adding ADV and a combined Adding 

ADV and Removing ADV of at least (i) 

0.18% as a percentage of US CADV, or 

(ii) 21.5 million shares ADV. 

The Exchange proposes to revise 

Removing Tier 1 by adopting an 

alternative qualification basis for the 

tier. As proposed, ETP Holders would 

qualify for the current rebate either by 

meeting the current requirements above, 

or by meeting the alternative 

qualification basis, as follows: Adding 

ADV of at least (i) 0.11% as a percentage 

of US CADV or (ii) 13 million shares 

ADV and Adding ADV and Removing 

ADV combined of at least (i) 0.16% as 

a percentage of US CADV or (ii) 19 

million shares ADV. The Exchange does 

not propose any changes to the 

Removing Rate for orders that remove 

liquidity that qualify for Removing Tier 

1. 

The Exchange believes that providing 

an alternative way for ETP Holders to 

qualify for Removing Tier 1 as proposed 

above will allow greater numbers of ETP 

Holders to qualify for the tier, and will 

incentivize more ETP Holders to route 

liquidity-removing order flow to the 

Exchange in order to qualify for the tier. 

This is turn would support the quality 

of price discovery on the Exchange and 

provide additional price improvement 

opportunities for incoming orders. As 

described above, ETP Holders with 

liquidity-removing order flow have a 

choice of where to send that order flow. 

The Exchange believes that as a result 

of the proposed change to Removing 

Tier 1, more ETP Holders will choose to 

route their order flow to the Exchange 

in order to qualify for the credits for 

removing liquidity associated with 

Removing Tier 1 given that there is an 

alternative way to qualify. 

As noted, the Exchange operates in a 

competitive environment. The Exchange 

does not know how much order flow 

ETP Holders choose to route to other 

exchanges or to off-exchange venues. 

Based on the profile of firms generally, 

the Exchange believes that additional 

ETP Holders could qualify for the tiered 

rate under the new qualification criteria 

if they choose to direct order flow to the 

Exchange. Without having a view of 

ETP Holders’ activity on other 

exchanges and off-exchange venues, the 

Exchange has no way of knowing 

whether this proposed rule change 

would result in any additional ETP 

Holders directing orders to the 

Exchange in order to qualify for the 

Removing Tier 1 rate. 

The proposed changes are not 

otherwise intended to address any other 

issues, and the Exchange is not aware of 

any problems that ETP Holders would 

have in complying with the proposed 

changes. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,10 in general, and 

furthers the objectives of Sections 

6(b)(4) and 6(b)(5) of the Act,11 in 

particular, because it provides for the 

equitable allocation of reasonable dues, 

fees, and other charges among its 

members, issuers and other persons 

using its facilities and does not unfairly 

discriminate between customers, 

issuers, brokers or dealers. 

The Proposed Change Is Reasonable 

As discussed above, the Exchange 

operates in a highly competitive market. 

The Commission has repeatedly 

expressed its preference for competition 

over regulatory intervention in 

determining prices, products, and 

services in the securities markets. In 

Regulation NMS, the Commission 

highlighted the importance of market 

forces in determining prices and SRO 

revenues and, also, recognized that 

current regulation of the market system 

‘‘has been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 12

While Regulation NMS has enhanced 

competition, it has also fostered a 

‘‘fragmented’’ market structure where 

trading in a single stock can occur 

across multiple trading centers. When 

multiple trading centers compete for 

order flow in the same stock, the 

Commission has recognized that ‘‘such 

competition can lead to the 

fragmentation of order flow in that 

stock.’’ 13

Given the current competitive 

environment, the Exchange believes that 

the proposal represents a reasonable 

attempt to attract additional order flow 

to the Exchange. Specifically, the 

Exchange believes that the proposed 

revisions to the requirements to qualify 

for Adding Tier 2 and Removing Tier 1 

by lowering or providing alternative 

requirements are reasonable because 


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38394 Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices 

14 15 U.S.C. 78f(b)(8). 

15Regulation NMS, 70 FR at 37498–99. 

16 15 U.S.C. 78s(b)(3)(A). 

17 17 CFR 240.19b–4(f)(2). 

they would promote execution 

opportunities for more ETP Holders 

routing order flow to the Exchange. 

The Exchange believes that the 

proposal as a whole represents a 

reasonable effort to promote price 

discovery and enhanced order execution 

opportunities for ETP Holders. All ETP 

Holders would benefit from the greater 

amounts of liquidity on the Exchange, 

which would represent a wider range of 

execution opportunities. 

The Proposal Is an Equitable Allocation 

of Fees 

The Exchange believes the proposed 

rule change equitably allocates its fees 

among its market participants. The 

proposed change would continue to 

encourage ETP Holders to both submit 

additional liquidity to the Exchange and 

execute orders on the Exchange, thereby 

contributing to robust levels of liquidity, 

to the benefit of all market participants. 

The Exchange believes that modifying 

the requirements to qualify for Adding 

Tier 2 and Removing Tier 1 would 

encourage the submission of additional 

adding and removing liquidity from the 

Exchange, thus enhancing order 

execution opportunities for ETP Holders 

from the additional amounts of liquidity 

present on the Exchange. All ETP 

Holders would benefit from the greater 

amounts of liquidity that would be 

present on the Exchange, which would 

provide greater execution opportunities. 

The Exchange believes the proposed 

rule change would also improve market 

quality for all market participants 

seeking to remove liquidity on the 

Exchange and, as a consequence, attract 

more liquidity to the Exchange, thereby 

improving market-wide quality. The 

proposal neither targets nor will it have 

a disparate impact on any particular 

category of market participant. 

Specifically, the Exchange believes 

that the proposal constitutes an 

equitable allocation of fees and credits 

because all similarly situated ETP 

Holders and other market participants 

would be eligible for the same general 

and tiered rates and would be eligible 

for the same fees and credits. Moreover, 

the proposed change is equitable 

because the revised fees would apply 

equally to all similarly situated ETP 

Holders. 

The Proposal Is Not Unfairly 

Discriminatory 

The Exchange believes that the 

proposal is not unfairly discriminatory. 

In the prevailing competitive 

environment, ETP Holders are free to 

disfavor the Exchange’s pricing if they 

believe that alternatives offer them 

better value. 

Moreover, the proposal neither targets 

nor will it have a disparate impact on 

any particular category of market 

participant. The Exchange believes that 

the proposal does not permit unfair 

discrimination because the proposal 

would be applied to all similarly 

situated ETP Holders and all ETP 

Holders would be subject to the same 

modified requirements to qualify for 

Adding Tier 2 and Removing Tier 1. 

Accordingly, no ETP Holder already 

operating on the Exchange would be 

disadvantaged by the proposed 

allocation of fees and credits. 

The Exchange further believes that the 

proposed changes would not permit 

unfair discrimination among ETP 

Holders because the tiered rates are 

available equally to all ETP Holders. As 

described above, in today’s competitive 

marketplace, order flow providers have 

a choice of where to direct order flow, 

and the Exchange believes there are 

additional ETP Holders that could 

qualify if they chose to direct their order 

flow to the Exchange. 

Finally, the Exchange believes that it 

is subject to significant competitive 

forces, as described below in the 

Exchange’s statement regarding the 

burden on competition. 

For the foregoing reasons, the 

Exchange believes that the proposal is 

consistent with the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with Section 6(b)(8) of 

the Act,14 the Exchange believes that the 

proposed rule change would not impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. Instead, as 

discussed above, the Exchange believes 

that the proposed change would 

encourage the submission of additional 

liquidity and order flow to a public 

exchange, thereby enhancing order 

execution opportunities for ETP 

Holders. As a result, the Exchange 

believes that the proposed change 

furthers the Commission’s goal in 

adopting Regulation NMS of fostering 

competition among orders, which 

promotes ‘‘more efficient pricing of 

individual stocks for all types of orders, 

large and small.’’ 15

Intramarket Competition. The 

proposed change is designed to attract 

additional order flow to the Exchange. 

As described above, the Exchange 

believes that the proposed change 

would provide additional incentives for 

market participants to route liquidityproviding and liquidity-removing orders 

to the Exchange. Greater liquidity 

benefits all market participants on the 

Exchange by providing more trading 

opportunities and encourages ETP 

Holders to send orders, thereby 

contributing to robust levels of liquidity. 

The proposed revised requirements for 

the tiered rebates and fees would be 

available to all similarly-situated market 

participants, and thus, the proposed 

change would not impose a disparate 

burden on competition among market 

participants on the Exchange. 

Intermarket Competition. The 

Exchange operates in a highly 

competitive market in which market 

participants can readily choose to send 

their orders to other exchanges and offexchange venues if they deem fee levels 

at those other venues to be more 

favorable. In such an environment, the 

Exchange must continually adjust its 

fees and rebates to remain competitive 

with other exchanges and off-exchange 

venues. Because competitors are free to 

modify their own fees and rebates in 

response, and because market 

participants may readily adjust their 

order routing practices, the Exchange 

does not believe its proposed fee change 

can impose any burden on intermarket 

competition. 

The Exchange believes that the 

proposed change could promote 

competition between the Exchange and 

other execution venues, including those 

that currently offer similar order types 

and comparable transaction pricing, by 

encouraging additional orders to be sent 

to the Exchange for execution. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change is effective 

upon filing pursuant to Section 

19(b)(3)(A) 16 of the Act and 

subparagraph (f)(2) of Rule 19b–4 17

thereunder, because it establishes a due, 

fee, or other charge imposed by the 

Exchange. 

At any time within 60 days of the 

filing of such proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 


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Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices 38395 

18 15 U.S.C. 78s(b)(2)(B). 

19 17 CFR 200.30–3(a)(12), (59). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). Rule 19b–4(f)(6)(iii) 

requires a self-regulatory organization to give the 

Commission written notice of its intent to file the 

proposed rule change, along with a brief description 

and text of the proposed rule change, at least five 

business days prior to the date of filing of the 

proposed rule change, or such shorter time as 

designated by the Commission. FINRA has satisfied 

this requirement. 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under Section 19(b)(2)(B) 18 of the Act to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSENAT–2021–14 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSENAT–2021–14. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSENAT–2021–14, and 

should be submitted on or before 

August 10, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–15336 Filed 7–19–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92403; File No. SR–FINRA– 

2021–018] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Make Technical and 

Other Non-Substantive Changes 

Within FINRA Rules 

July 14, 2021. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on July 6, 

2021, the Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I, II, 

and III below, which Items have been 

prepared by FINRA. FINRA has 

designated the proposed rule change as 

constituting a ‘‘non-controversial’’ rule 

change under paragraph (f)(6) of Rule 

19b–4 under the Act,3 which renders 

the proposal effective upon receipt of 

this filing by the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

FINRA is proposing to make technical 

and other non-substantive changes 

within FINRA rules. 

The text of the proposed rule change 

is available on FINRA’s website at 

http://www.finra.org, at the principal 

office of FINRA and at the 

Commission’s Public Reference Room. 

Below is the text of the proposed rule 

change. Proposed new language is in 

italics; proposed deletions are in 

brackets. 

* * * * * 

Schedule A to the By-Laws of the 

Corporation 

* * * * * 

IM–Section 4(b)(1) and (e) Exemption 

From Certain Registration and 

Membership Application Fees for 

Certain NYSE and NYSE [Alternext 

US]American LLC Member 

Organizations 

NYSE and NYSE [Alternext 

US]American LLC member 

organizations that become members of 

FINRA pursuant to IM–1013–1 and IM– 

1013–2, respectively, shall not be 

assessed the fee set forth in Section 

4(b)(1) to Schedule A of the FINRA ByLaws for the initial Form U4 filed by 

firms for the registration of any 

representative or principal associated 

with the member organization at the 

time a firm submits its application for 

FINRA membership. Such firms also 

shall not be assessed the membership 

application fee set forth in Section 4(e) 

to Schedule A of the FINRA By-Laws. 

However, those firms will otherwise 

remain subject to FINRA’s By-Laws and 

Schedules to By-Laws, including 

Schedule A. 

* * * * * 

FINRA Rules 

* * * * * 

1000. Member Application and 

Associated Person Registration 

* * * * * 

IM–1011–1. Safe Harbor for Business 

Expansions 

This interpretive material concerns 

the types of business expansions that 

will not require a member to submit a 

Rule 1017 application to obtain FINRA’s 

approval of the expansion. This safe 

harbor applies to: (1) Firms that do not 

have a membership agreement, and (2) 

firms that have a membership agreement 

that does not contain a restriction on the 

factors listed below. 

* * * * * 

The safe harbor is not available to any 

member that has disciplinary history. 

For purposes of this Interpretation, 

‘‘disciplinary history’’ means a finding 

of a violation by the member or a 

principal of the member in the past five 

years by the SEC, a self-regulatory 

organization, or a foreign financial 


khammond on DSKJM1Z7X2PROD with NOTICES